Substance and Governance

Management companies managerial functions

EU Fund management companies must adhere to strict regulatory guidelines regarding their management of EU UCITS and AIFs and the role of the Designated Person in the management (“DP”).

Six managerial functions have to be carried out by DPs: Regulatory Compliance, Operational Risk Management, Capital and Financial Management, Fund Risk Management, Investment Management, and Distribution.

A EU Man.Co is required to have at least: two local resident directors, half of its directors in the EEA, and half of its managerial functions performed by at least two DPs resident in the EEA.

Prior to appointment, the CSSF must pre-approve proposed directors of regulated Man.Cos and funds.

We provide managerial functions to Man.Cos

Any director carrying out managerial or ‘designated persons’ role for the fund board must be able to demonstrate they have the required experience to fulfil that role and will be considered to have an executive role.

Many directors are now refusing to take on new directorships where they have to carry out designated persons’ roles, as they do not wish to become executive directors.

Both UCITS, AIFMD and local legislation require the governing body to have adequate collective knowledge, skills and experience to understand the activities of a fund, and in particular the main risks involved.

For boards and directors concerned with these new duties and responsibilities, using our PCM third party management company provides an ideal solution.

PCM can take on the designated person (DP) role on behalf of the fund for each (or part) of the management functions (with the exception of ‘Decision Making’).

Our Management Company approved by regulator, may supervise the Business Plan / Program of Activity of the fund and will cover the fund’s requirements including the on-going monitoring and reporting and regulatory reporting.

Our clients may have their own existing Management Company in Luxembourg providing services to their funds, but perhaps may not have enough resources to fully cope with the regulation. They can simply choose to appoint us as third-party management company.

Management Company managerial structuration is a straightforward process

First the fund directors terminate the existing administration, investment management and distribution agreements.

They then appoint our PCM independent Management Company as manager.

Finally PCM along with the directors re-enters into administration, investment management and distribution agreements, where our PCM performs main oversight of delegates, subject to the control of the directors.

Fund’s Directorship

We may provide high quality independent fund directors, to deliver the governance and oversight standards that investors and regulators request

Pearltree is working closely with experienced independent directors and skilled internal directors, bringing different skills, cultures and backgrounds in your Fund’s Board. They are supported in their crucial responsibility by PCM who provides the necessary required information to ensure their independent analysis and decision process.